Yves here. The reason the MSNBC depiction of austerity matters is that the channel increasingly serves as the messaging apparatus of the Democratic party.

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Jointly posted with New Economic Perspectives

On March 18, 2013, Lawrence O’Donnell stated that John Boehner’s admission that the U.S. faces no current debt crisis vindicated Paul Krugman, who O’Donnell described as “a lonely voice opposing austerity.” It is true that Krugman has been a strong opponent of austerity and has been proven correct. It is also true that MSNBC has frequently portrayed Krugman as an isolated, virtually sole opponent of austerity.
I wrote about one of these MSNBC efforts in a November 12, 2012 column entitled: “Chris Matthews Embraces Self-Parody by Calling for Obama to Ignore Krugman.” The context was that Krugman was supporting our warning that Obama’s efforts to achieve a “Grand Bargain” would impose destructive austerity, heavy cuts to vital social programs, and begin to unravel the safety net (which is why I call it the “Grand Betrayal”). Matthews was enraged that Krugman opposed Obama’s proposed betrayal. The key passages from my article relevant to O’Donnell’s remarks are:

On Friday, November 9, 2012, Matthews advised his viewers that it was essential to ignore Paul Krugman’s objections to the economic impact of the Grand Bargain because he was on ‘the far left.’ (Matthews then danced around that label.) At no time did any of the MSNBC hosts ask anyone with economics expertise whether austerity and beginning to unravel the safety net would be harmful or helpful to the nation. The logical incoherence I have explained was never mentioned. The only time an economist was mentioned was Matthews’ fact and logic-free denunciation of Krugman. Matthews did not explain why Krugman opposed the Grand Bargain.

Matthews claimed that it was essential for Congress and the public to ignore a Nobel Laureate in Economics’ warnings that what was being proposed was a bad plan that would harm our economy. Matthews said that Obama (a lawyer and politician) must tell Krugman that he was going to ignore Krugman’s economics warnings because “I’m President, you’re a columnist.”

Matthews has again proved one of our family rules – it is impossible to compete with unintentional self-parody. Let’s try a slight variant of Matthews’ motif. If a Nobel Laureate in Physics writes a column warning that the President is proposing a bad plan to send humans back to the moon because the plan relies on bad physics the President should respond: “I’m President, you’re a columnist” – and proceed to ignore his warning.

Another lead MSNBC commentator – and his more liberal co-host – also portrayed Krugman as far outside mainstream economics and suggested that anyone opposing austerity as a response to the Great Recession must be so obviously wrong that his views should be dismissed. Joe Scarborough wrote a column on January 28, 2013 in Politico denouncing Krugman’s opposition to austerity. His title said it all: “Paul Krugman vs. the world.”

Mr. Krugman’s view is that Americans would be better off if its government ran deeper deficits and ignored its longterm debt. That, of course, runs counter to conventional wisdom across the Western world….

[I]t was fascinating having Mr. Krugman on for the reason that his worldview runs counter to almost all mainstream economists and he got a Nobel Prize for his efforts.

Scarborough stressed that Krugman’s views shocked his more liberal co-host, Mika Brzezinski and adopted her reasoning that not imposing austerity today – during a recovery from a Great Recession – because we might have deficits in safety net programs years from now was analogous to not reducing carbon emissions now on the grounds that global climate change did not yet inflict grave injury on the world. Her metaphor was that Krugman was a deficit-denier analogous to a global climate change denier.

I trust that the reader, unlike Scarborough and Brezezinski, can see that this metaphor is not remotely analogous. Here is a hint on how to make their metaphor more analogous. Would we, because of global warming, cut off heat to public housing units during a terrible blizzard in January and let the most vulnerable die and millions of others suffer in agony? Even that revised metaphor is not fully analogous because while a barrel of oil not used today could be available five years from now, money is not like a barrel of oil. If we do not spend a dollar today to increase demand and speed our recovery from the Great Recession we do not reduce future deficits. The opposite is true. The “paradox of thrift” in response to a recession is a well-known economic response that causes austerity to reduce growth, which can increase current and future deficits. What Scarborough and Brezezinski revealed with their metaphor is that they lack even the most basic understanding of money, which means they cannot understand budgets, the impact of austerity, or the nature of an economy like the U.S. with a sovereign currency.

In sum, O’Donnell could be excused for believing that Krugman is a “lonely voice opposing austerity” if O’Donnell is getting his economic news and analysis from his MSNBC colleagues. (O’Donnell plainly does not get up early on Saturdays and Sundays to watch Chris Hayes – who has been excellent in explaining why austerity is an insane, self-destructive policy.)

What O’Donnell got wrong is not Krugman’s opposition to austerity. Krugman has explained that as he came to understand more fully the nature of money in a Nation with a sovereign currency he has moved strongly in the correct policy direction by increasingly opposing austerity as self-destructive. What O’Donnell, Matthews, and Scarborough all miss is that Krugman was never a “lonely voice” in opposing austerity. The reality is the opposite of Scarborough’s claims in his column – Krugman’s position that austerity in response to a Great Recession is a self-destructive, insane policy is the normal position of economists. Economists overwhelmingly support automatic stabilizers (which work in the opposite direction of austerity). While Republicans like Scarborough worship austerity now with the Obama administration in power, Republican administrations of the modern era have consistently refused to inflict austerity on the economy when they controlled our policy response to recessions.

The fact that a liberal commentator like O’Donnell thinks that Krugman was a “lonely voice” opposing austerity tells us something vital about the modern media and the economic policy incoherence of the Obama administration about austerity. What is true is that the “serious” media assumes that austerity is the only “serious” policy. What is true is that former Treasury Secretary Timothy Geithner, a man with no expertise in economics, finance, or money and a track record of catastrophic failure as a financial regulator, became Obama’s principal economic advisor. Geithner loved austerity. The result is that the administration constantly contradicts itself about austerity. Half the time, the administration praises austerity and takes “credit” for increasing austerity. MSNBC, again with Chris Hayes as the great exception, typically supports the administration’s policies. Here is a thought experiment: who is the Obama administration spokesperson who appears frequently on MSNBC and explains why Krugman is right about austerity? There is none.

It is very harmful to the Nation that MSNBC has led people to believe that there is only one, presumably hopelessly weird, economist in the world who opposes austerity as a response to the Great Recession. Krugman’s view is the norm among economists – and the minority of economists here and in the EU who support austerity is made up overwhelmingly of the people whose policies have proven over the last three decades to be so criminogenic that they produced the epidemics of control fraud that drove the second phase of the S&L debacle, the Enron-era scandals, and the ongoing crisis.

MSNBC could do the nation a great service by routinely presenting the economic views of those with a track record of predictive success. I do not urge that we be the sole guests, but O’Donnell’s remarks about Krugman show that the exclusion of the many experts who got things correct has been so extreme that even O’Donnell is unaware that there is a consensus among economists against austerity – and that the degree of that consensus among the experts who have repeatedly been proven correct is extraordinary.

50 comments

> It is true that Krugman has been a strong
> opponent of austerity and has been proven correct.

Krugman is also a proponent of piling on debt as
long as interest rates are low, which will be
proven to be just as bad an idea as austerity,
given what the globalization of labor has done
and is still doing to developed world wages.

“…proven to be just as bad an idea as austerity, given what the globalization of labor has done and is still doing to developed world wages.”

Is there supposed to be some kind of logical connection here? Could you give us an example of the dire consequences that would arise from borrowing and explain what connection this has to the price of beans in Bejing?

Austerity won’t make bad debts good (no argument from me),
but why is increasing public debt somehow supposed to cure
excessive private debt which is crushing the
average developed world globalized-wage slave, particularly
when the corruption is still in place, diverting the
skim?

Are these globalized-wage slaves supposed to make
up for the loss of purchasing power and income by
levering themselves up, again, even before they’ve
got the prior debt off their back? How many wage
slaves are in a position, let alone have the assets
or credit, to front run the Fed?

Most of the economy dies from neglect, while Ben
has the FIRE sector in intensive care with a money
drip. This will not end well.

What is crushing the wage slaves is the corporate personhoods garnering 98% of all the profits unto themselves, over the last 25 years. So much for trickle down….remember, no MSM were fussing over the deficit until ’08…then, it was all the poor foolish folks to blame for buying over-priced real estate!! Let ’em eat derivatives!!

Public debt or private debt? When it comes to public debt, Krugman sees limits. When it comes to private debt, Krugman sees the blue empyrean as the limit.

• KnotRP says:

…as long as interest rates are low…

You do know that, even though there are situations such as in the mid-naughties when there was an inverted yield curve and Greenspan lost control and could not increase long-term interest rates, there is no conceivable situation in which the Fed could not keep interest rates low?

Nope. I think bad debts should be written off; this
is the natural result of excessive lending with poor underwriting. I think lending people’s own duress payments
back to them (eg Greece), when they are already
leveraged beyond their productive capacity, is a bit
like being in favor of debtor’s prison….the intention
is to provide no escape from badly underwritten debt.

More public debt is like deck chair rearrangement, and
the way we are doing it, it’s only rearranging the deck chairs in first class.

A Jubilee would be “let all debts expire” approach,
without regard to any context, and I am not advocating
that (though I would rate that slightly higher than putting
everyone in Debtor’s prison like conditions).

I think Keen’s idea of just cutting everyone checks
monthy (where debt repayment has priority — send the
checks like the IRS sends refunds, where creditors
get first priority payment) is more workable than a Jubilee
which only favors the imprudent and the uninformed,
but probably not practical.

I’m just saying we’re not going to solve anything
with either austerity nor having the FIRE sector
on monetary drip. But of course, what we’re doing
is good for the banks, so I guess that’s all that
matters to those who decide policy.

It is unfortunate that some people regard MSNBC and CNBC as sources of information, when anyone with a shred of economic understanding, or even common sense, sees them as propaganda leavened with stock quotations.

The formula seems to be one shrill nincompoop after another, my personal favorite being Larry Kudlow, who can only be described as odious.

Perhaps the country will wise up before it is entirely too late. I wish I could believe this was starting to happen, but I see no signs of it apart from a few blogs.

You should consider browsing through dsl reports twice daily links section from time to time. It’s an eye opener.

Answering your question from my perspective it is because of a few main points. Cable and satellite subscribers are forced to buy many channels they will never watch. I have both fox and msnbc’s blocked.. I don’t block CNN for disaster porn. However, I should block it since I refused to view one minute of the last couple disasters. CT shooting and the LA police madness.

But I must pay for all of them if I want television at all. And telco/cable own/choke the system. I cannot buy at any price an internet connection fast enough to stream video. And most folk I know who can stream are worried sick about caps/usage. So what’s the point of having it?

We desperately need to break the cable telco chokehold and spend the money this anti-austerity post discusses on establishing affordable unlimited fiber to every home and business on the U.S. phone/elec. grid.

As soon as cable companies loose enough cable TV subscriptions, they will start charging for network connections based on bytes consumed (some already do, no?) such schemes as gold, silver, bronze plans. And they are loosing TV subscriptions fast due to overcharging and forcing everyone to have a digital box per TV at 10 bucks a month per box. So the basic network connection will jump dramatically for anyone streaming TV, video or other data intensive applications over the net. This will be pretty hard on a lot of people who run small business from home based on low internet costs.

I imagine ultimately, Obama will just have to mandate that we all get a network subscription of some sort as an integral part of keeping us safe from the terrorists. I can hear the Obamabots now; “This will keep connection costs low as the providers will have a large pool.” Uh-huh… If it’s part of a campaign strategy for the next in line to the throne, they might even offer a public network option (only during the campaign, of course) and then focus on what they love most, extracting rent, rent, and more rent after the election theatrics.

Don’t mix the peace prize and the economics prize. First off they are on different topics, awarded by different committees. Second, the economics prize was set up and and is awarded by the Swedish central bank, Nobel never included such a prize in his will.

Here’s the full story, from the Nobel Prize website. Sadly, it looks like calling it the Nobel in Economics is probably legitimate. But hey, let’s not forget that Barak Hussein Obama won the Peace Prize, so obviously that one doesn’t mean squat either. Anywho, here’s what the Nobel peeps have to say:

In 1968, Sveriges Riksbank (Sweden’s central bank) established the Prize in Economic Sciences in Memory of Alfred Nobel, founder of the Nobel Prize. The Prize is based on a donation received by the [Nobel] Foundation in 1968 from Sveriges Riksbank on the occasion of the Bank’s 300th anniversary. The first Prize in Economic Sciences was awarded to Ragnar Frisch and Jan Tinbergen in 1969.

The Prize in Economic Sciences in Memory of Alfred Nobel is awarded by the Royal Swedish Academy of Sciences, Stockholm, Sweden, according to the same principles as for the Nobel Prizes that have been awarded since 1901.

1. In case you missed it, these fights matter. And we’ve been told by people in DC that what is written here has an impact from time to time. For instance, our series on the OCC settlement led to MSM criticism and some bills are being drafted that come directly out of our work. So you can sniff that this is irrelevant, and you happen to be wrong.

2. No one is making you read what we write. If American economics (and economics are political) don’t interest you, go read another blog. The Internet is a big place.

Were 1950s Marxists very right wing or something? Because the ‘left’ in America is actually center-right… I just dont understand it in when people call American Liberals things like Commies and Marxists when theyre almost like clones of the right, but more moderate…

Exactly. I think he maybe conflates some of the leftists posting on this blog with “US liberals” as a whole, which is funny considering what a fractional and atomized minority marxists are in America – such a minority as to be considered nonexistent politically. So disenfranchised and rare are actual marxists or communists in the US that you will meet literally no one in common conversation who can even name the communist presidential nominee come election time. (Can anyone here, without googling it? I can’t.) US liberals by and large are uncomfortable even calling themselves socialists, much less identifying with – or even knowing very much about – marxism. Admittedly, Daniel used the nebulous modifier “in some way” in his statement, so I’ll give him some leeway for that since it renders his statement almost meaningless.

If Daniel wants a better understanding of “US liberals,” he should go to Wonkette, TPM, Kos, Huffpo, or watch the Daily Show. Their variety outnumber the “1950s European marxist” contingent in the US something like 100:1 (probably more; pulling ratio out of my arse).

Daniel also hilariously interprets the US or its academic institutions as ever having been part of “a great democracy,” certainly a questionable assertion from where I’m standing. If that’s a more intellectually and superiorly nuanced conclusion than the French parochial opinion he derides, then yes, please lump me in with the hideous French provincials and plebes and not with Daniel and his powerful and superior cosmopolitan Parisian intellect.

I dont think theres a communist party in America anymore having presidential nominees… If CPUSA had a nominee, I sure didnt know who it was.

I know that there were like 3 socialist parties that had presidential nominees, one of them being Jerry White of the Socialist Equality Party (What in gods name do we need THREE socialist parties for anyway?), but of course im sure only like a hundred people nationwide voted for him. And I only know of Jerry White because WSWS.com shamelessly mentioned him like every day during the campaign: anyone who doesnt visit such a hopelessly obscure website has no clue who he is (not that I blame them).

(I voted Green myself. I wanted to at least vote for a party people have actually heard of while not voting for the Repubs Dems or Libertarians… I mean, who I vote for matters even less than the type of toothpaste I use, so I decided may as well just vote Green)

There was a time in this nations history where there were a couple dozen openly socialist mayors at the same time, but that was almost a hundred years ago, and before Mccarthyism.

These days its hard to even find true New Deal liberals, much less any ‘marxists’. The ‘Liberals’ these days are on a similar position on the left-right spectrum as Barry Goldwater was 50 years ago, being to the right of Nixon. I mean, Nixon thought positively of things like a Negative Income Tax: Now imagine Obama even mentioning such a thing, it would be unheard of, and far beyond anything acceptable in todays political conversation.

“I dont think theres a communist party in America anymore having presidential nominees… If CPUSA had a nominee, I sure didnt know who it was.”

Peta Lindsay was the Marxist-Leninist candidate for the Party of Socialism and Liberation, but ya, I had to look that up. I didn’t even know about Jerry White. CPUSA hasn’t had a candidate since 1984, apparently.

Monty Python certainly had the finger on the button with their People’s Front of Judea vs Judean People’s Front bit.

Harvey Pekar co-wrote a comic history with multiple other authors and artists about the SDS that really detailed the kinds of fractures that occur in leftist organizations. All the authors were directly involved at the time. A veritable rainbow of ideas about what leftism and labor organization meant and how things were to be accomplished, anarchist contingent versus planned staters, etc. Lots of stuff in that book about alleged infiltration and capture too.

You nailed it, Mass. As Black writes, “The fact that a liberal [sic] commentator like O’Donnell thinks that Krugman was a ‘lonely voice’ opposing austerity tells us something vital about the modern media and the economic policy incoherence of the Obama administration about austerity.”

Right, with almost no scrutiny, right-wing media like MSNBS and neoliberal Obama are swallowed as moderate and centrist, even leftist(!?). And the alt-universe GOP, meanwhile, in its lunatic-fringe orbit of ‘Libertarian-authoritarianism’, is somehow seen as an acceptably-sane, almost legitimate political counterweight (McCain-Palin / Romney-Ryan, really???). Thus, Orwellian doublethink has taken firm possession of the national psyche.

So I no longer believe that the austerity debate by MSM and Washington is merely “incoherent” or mistaken as Black generously suggests—not at all. On the contrary, I believe it is a deliberate campaign to stage the ultimate coup, the destruction of democracy and the imposition of neo-fascist authoritarianism. The austerity debate is dishonest at its core, as is Obama’s insistence on drawing self-funded “entitlements” into budget negotiations where they do not belong; it’s a prelude to robbery.

The masters of the universe do not seek sound footing for optimum economic output or wealth creation; they do not want the greatest good for the greatest number as they claim. No, they seek power, absolute power, and that requires the disempowerment of the middle class and the subversion of democracy. Austerity is the “creative destruction” of “disaster capitalism”. This is their method and madness, the Shock Doctrine blueprint, and very few insiders have any claim to innocent error in its application … except perhaps Chris “let me be an ignorant ass” Matthews.

If US-centric politics is of such limited value, why do US corporations, banks, military contractors and ego-centric scum — like Pete Peterson and the Koch brothers — put so much focus and $$$$$$$$ there?

I’m a little worried about the early morning hours on your postings. Please don’t forget the economics of sleep, safe and restful, plentiful, not to be depleted, not to suffer prolonged austerity.
Take care. With much gratitude for your writing.

Why does everyone ignore the real elephant in the room? The agenda of the oligarchs, who have their feet on the throats of the GOP, is to use the clock to keep any progressive solutions from being passed into law. Invent any issue, say, the deficit, push it hard enough to make it the number ONE issue and use it to hide behind long enough to beat back everything else. The GOP doesn’t give a hoot about deficits or the national debt, and proved that time and again when they had the checkbook in their hands. If Obama won’t say it and brand the GOP as servents of the oligarchs and expose what’s going on, who will? Let’s ignore the class-war charge. There has always been class warfare, it’s older than sex, and the good guys are losing.

The elephant in the room? I applaud the obvious symbolism, but Obama doesn’t denounce austerity plans for the same reasons Obama created the catfood commission, appointed Ben Bernanke, filled the stimulus with tax cuts for the wealthy, and always manages to find money for another neo-colonial enterprise. The difference between Obama and the GOP is enough to con dolts who vote on emotion.

Excellent post Bill. I happen to believe that it is important for journalists to be journalists. That is, it would be fine for O’Donnell to flat cross-examine Dr. Krugman – he might learn something. But this commentary dismissal of a whole range of economists because their premises violate his sophomoric understanding of economics is NOT journalism.

Across the web, there are lots of screamers pointing fingers. They see bank bailouts – and blame the government. They see fraud – and blame the banksters. They see a lack of prosecutions and blame the prosecutors. What is and has happened has made folks angry. I suspect that if there were a way to measure public unhappiness, it would be near record highs right now. Then along comes the 4th estate, which today has greater penetration into the public consciousness than ever before – and it routinely suggests that economists who oppose austerity are champions of the dreaded FSA (free stuff army), enablers of government excess (while almost ignoring the ongoing loss of individual rights), good time Charlies and generally not up to being the adults in the room. Yes my friends, the government failed to protect us and has failed to timely respond to criminal acts that got us here. But, there were criminal acts by men in pinstripes (some of whom O’Donnell has flat swooned over). And our press is flat in the bag for the status quo. Dissing Krugman is just part of the game – as was ridiculing the trillion dollar coin. Thanks Bill, for pointing this out. We need to do all we can to turn the media around.

O’Donnell really is a damn fool sometimes. I can understand his not knowing that there are lots of economists out there who don’t think austerity is a good idea, but even among well-known economists Krugman’s not alone. Robert Reich has been advising against austerity on a weekly basis. From what I’ve read, Noriel Rubini (sp?) isn’t fond of the idea, either. Reich’s a former Secretary of Labor, for crying out loud.